1. The price reported in Column 4 is a weighted average price. These shares were sold in multiple transactions at prices ranging from $26.67 to $26.77, inclusive. The reporting person undertakes to provide to Discover Financial Services, any security holder of Discover Financial Services, or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the ranges set forth in footnote 1 to this Form 4.

2. This option vested on January 2, 2004.

3. In connection with Discover Financial Services' Spin-Off from Morgan Stanley, this option was granted by Discover Financial Services in replacement of an option to purchase 37,680 shares of common stock of Morgan Stanley at an exercise price of $57.03.

/s/ Simon Halfin as Attorney-in-Fact for David W. Nelms

07/07/2011

** Signature of Reporting Person

Date

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person,
see
Instruction
4
(b)(v).